Personal Property: Definition, Types, and How It Affects Insurance

Key takeaways
* Personal property refers to movable assets—everything other than real estate—such as furniture, electronics, clothing, and digital assets.
* Homeowners insurance typically covers personal property using a percentage of the dwelling limit (commonly 50%–70%).
* Coverage options include replacement cost (covers new-item replacement) and actual cash value (pays depreciated value).
* High-value items may require higher limits or a separate scheduled/personal property floater.
* Maintain a detailed inventory (photos, receipts) stored off-site to streamline claims.

What is personal property?

Personal property (also called movable property, movables, or chattels) includes assets that are not fixed to land or a building. It can influence loan underwriting and valuation because lenders may consider the value of a borrower’s personal property when assessing overall creditworthiness.

Types of personal property
* Tangible: Physical items such as vehicles, furniture, appliances, boats, collectibles, clothing, and tools.
* Intangible: Nonphysical assets such as digital assets, domain names, patents, copyrights, and other intellectual property.

Personal property as collateral
* Some loans are secured by personal property (for example, car loans where the vehicle is collateral).
* Lenders may also consider the value of personal assets when evaluating unsecured creditworthiness.

How personal property affects homeowners insurance

Homeowners policies typically insure both the dwelling and the homeowner’s personal property (the “contents”). Common policy features:

Coverage limits
* Insurers often set personal property limits as a percentage of the dwelling coverage—commonly 50%–70% of the dwelling’s insured replacement cost.
Example: If a home’s rebuild cost is $200,000 and the policy uses 70%, the personal property limit would be $140,000.

Replacement cost vs. actual cash value
* Replacement cost: Pays enough to replace the lost/damaged item with a similar new item (no depreciation).
* Actual cash value (ACV): Pays the item’s depreciated value (original cost minus depreciation for age/wear).
* Recoverable depreciation: Some policies allow you to recover depreciation after replacement by submitting receipts, effectively combining ACV with eventual replacement-cost reimbursement.

Special limits and scheduled property
* Policies commonly impose sublimits for categories like jewelry, furs, artwork, and electronics. For example, jewelry might be limited to a few thousand dollars.
* To insure high-value items fully, purchase a scheduled personal property endorsement (floater) or raise limits on the policy.

Preparing for a claim: inventory and documentation
* Create a room-by-room inventory listing items, approximate values, purchase dates, serial numbers, and any receipts.
* Photograph or videotape belongings; capture closets, drawers, garage, and sheds.
* Store inventory and backups off-site or in cloud storage.
* Keep appraisals for antiques, artwork, and collectibles.

Examples of personal property covered by homeowners insurance
* Furniture and rugs
* Appliances and electronics
* Clothing and jewelry (subject to limits)
* Dishes, cookware, and decor
* Tools, lawn equipment, and outdoor gear
* Collectibles, art, and antiques (may need scheduled coverage)
* Digital assets and certain intangible property—coverage can be limited and may need special endorsements

Common questions
* What’s the difference between personal property insurance and personal liability insurance?
Personal property insurance reimburses you for damage to or loss of your belongings. Personal liability insurance covers legal expenses and damages if you are found responsible for injury or property damage to others.
* Should I choose replacement cost or actual cash value?
Replacement cost provides fuller reimbursement but typically costs more in premiums. ACV pays less initially because it factors in depreciation. Consider your budget and how quickly you’d want to replace items.
* How do I insure expensive jewelry or art?
Buy a scheduled personal property endorsement (floater) or increase sublimits to cover full appraised value.

Bottom line

Personal property covers most movable assets inside and outside your home and plays a significant role in insurance protection and lending. Review your homeowners policy to understand limits and valuation methods, schedule valuable items when necessary, and maintain a detailed, off-site inventory to speed and strengthen any future insurance claims.